Cut-price retailer Stein Mart said store closure expenses plus sales falls at older locations drove down fourth-quarter profit by 8%. Full-year profit, however, rose 34%.

Quarterly net income was US$21.1m compared to $22.8m in the same period last year. Revenues were down 4% to $427.4 from $444.9m in the quarter. Fourth-quarter same-store sales slipped 4.4%.

2005 earnings were $50.9m compared to $38m last year, on net sales of $1.48bn compared to $1.46bn a year ago. Same-store sales for the full year increased 0.2%.

"We are pleased to report record earnings for 2005 and believe our performance demonstrates the underlying strength of our efforts to improve productivity," said Michael Fisher, president and chief executive.

"Our mission to return to a 7% operating margin continues with new and evolving initiatives that will be more apparent in the second half of 2006, as we realise the return on investments we continue to make for the long-term benefit of our company."

Fisher said the company expects better 2006 results than last year's, but said it forecast lower first-half earnings because of markdowns and the move away from children's apparel.

"Our greatest opportunity for progress will be in the second half of the year when the majority of new stores open, and more efficient markdown allocations, a re-assorted home merchandise collection, and the expansion of certain apparel categories should benefit gross margin," Fisher added.

Stein Mart stores sells moderate to designer brand-name apparel for women, men and young children, as well as accessories, gifts, linens and shoes.